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Purchase and Sale of Dental Practice

Purchase and Sale of Dental Practice




a. How long is your commute and is the return on investment going to be worth the drive. (Rural vs Urban dental practices);
b. How many dental practices in the immediately surrounding area. (Immediately surrounding area will vary from location to location. For example the immediately surrounding area for a dental practice in a small town will include the number of dental practices for the surrounding towns and cities.)
c. What is the access to the dental clinic – convenient public transport, good roads, parking.


a. Are you going to proceed by way of a Letter of Intent (LOI) or a Contract of Purchase and Sale (CPAS)?

i. LOI is faster since it does not include the final language, however it will usually restrict what terms and conditions can be included in your CPAS. I prefer preparing the CPAS and providing that it is subject to review and acceptance by your lawyer, since, it lets the lawyers for both the Purchaser and Vendor to tailor the CPAS to suit individual needs, plus you do not have to draw up a separate CPAS, which saves time and money.

b. Items that should be addressed in CPAS:

i. Preamble – Name of dental clinic, and location, parties are entering into the sale of all of the assets;

ii. Purchase and Sale of Assets

(1) Description of Assets,
(2) Assets that are excluded (very important to make sure that the assets which are in the name of the company but are personal in nature and not meant to be transferred are set out in detail – vehicles, cell phones, laptop computers, paintings, books,etc.)

iii. Purchase Price

(1) Total Purchase Price and its allocation – a) equipment, furniture, fixtures, b) leasehold improvements (note GST is payable on these), c) instruments and supplies, and Goodwill.

iv. Payment of Purchase Price

v. Vendor and Principal’s Representations and Warranties

(1) Status of Vendor,
(2) Authority,
(3) Assets,
(4) Exclusive Right,
(5) No Violation,
(6) Equipment,
(7) Leases,
(8) No Action,
(9) Adverse Effect,
(10) Business Name,
(11) Agreement,
(12) Information,
(13) Books and Records,
(14) Conformity with Laws,
(15) Terms of Employment,
(16) Accuracy of Representations,
(17) Canadian Resident,
(18) Compliance, and
(19) Regulations.

vi. Covenants of the Vendor

(1) Liability to Purchaser and successors,
(2) Indemnification of Purchaser,
(3) Termination of Employees,
(4) Rehiring of Employees,
(5) Overtime all paid,
(6) Operation of the business,
(7) Debts and Liabilities,
(8) Telephone Numbers and Transfer, Yellow Pages
(9) Website,
(10) Letter of Introduction,
(11) Dental Equipment,
(12) Insurance,
(13) Accounts Receivable,
(14) Conduct of Business and Access by Purchaser,

vii. Covenants of the Purchaser

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